3 crore ITC shares held by Govt owned institutions may hit market; thanks to an active initiative floated by citizens of repute questioning the Governments contrarian policy through a PIL. Filed by Mrs. Sumitra Pednekar, wife of Maharashtra’s former Home and Labour Minister, Satish Pednekar, who died of oral cancer in 2011, questions have been raised on the Government’s contrarian policy on Tobacco. Top officials of the Tata Trust and Tata Memorial Hospital are supporting Mrs Pednekar in her drive to get the government follow what was mandated by various statues in relation to tobacco control.
The contention made while filing the PIL was that while on one hand the Government is committed to tackling the problem of tobacco, the Insurance companies and SUUTI invest in ITC and other companies making tobacco products. According to the submission tobacco is the only consumer product that has no benefits and only causes death and disability.
Insurance Companies, along with SUUTI (Specified Undertaking of Unit Trust of India) reportedly holds a 32% stake in ITC Ltd which is primarily a tobacco company, though it projects itself as a diversified conglomerate. The 383 crore shares that are held by the government owned Insurance Companies and SUUTI accounting for a majority of stakes in ITC, translates into a humongous amount considering the price at which the stock is currently trading.
The total value of the stake held by these government owned institutions in ITC comes to more than a staggering Rs 1, 00,000 crore. Out of this figure a huge sum of around Rs. 76,500 crore is the amount invested by the public sector insurance companies. This is clearly larger than the Annual Budgets of many of the smaller Indian States and can be a sound substitute for budgetary outlays that the Central Government earmarks for its citizen welfare measures.
The government earns a decent amount of more than Rs 3,000 crore through dividends paid out by ITC. But then the question to ask is, whether investing in a socially undesirable sector and earning dividends and then spending crores on treating the health hazards that the industry brings with it makes any sense? The government can rather utilise the amount locked up in such a socially undesirable investment for carrying out its stated budgetary plans as far as citizen’s health is concerned.
